Roche Backs Out Of $600 Million Acromegaly Drug Development Deal
August 13, 2014
By Krystle Vermes, BioSpace.com Breaking News Staff

Roche AG (RHHBY) has announced that it will not move forward with a commercial agreement that was set to become official with Chiasma, an Israeli firm. This news comes after Roche consulted with regulators on test results of a drug designed to treat Acromegaly. Although the drug had favorable results in Phase 3 clinical trials, Roche AG will not continue to work with Chiasma.

"The results of the Phase 3 trials were excellent and a celebratory event was held in June to publicize them, attended by all Roche's senior executives who were all happy and satisfied,” said Chiasma CEO Roni Mamluk in a conference call. “There was no problem with the results. What is apparently involved is a strategic decision by them whether or not to become more deeply involved in the endocrinology sector."

Following the news of Roche AG leaving the partnership, Chiasma has shown no hesitation with its plans to present clinical trial findings to the U.S. Food and Drug Administration. Chiasma is still on schedule to release its drug by 2015.

"Our goal is to look for a partner in launching the product, but we can certainly also do it by ourselves,” Mamluk went on. “We are now producing the product ourselves through outsourcing, and because the product treats a rare disease, the number of doctors dealing in the field is small, and they can also be reached with a limited sales staff.”

A majority of the money that Chiasma had received was already divided up among investors, according to Globes. Chiasma assumed that it would soon be transferring its product over to Roche, and employees were laid off in the process. Now the firm will look to maintain what it has left.

Currently, there is only one approved drug on the market to treat Acromegaly, a disease that causes excessive bone growth within the body. This drug causes a large amount of pain in patients when it is injected.

The drug that Chiasma has been working on can be taken orally, which eliminates the pain element. The global market for treating Acromegaly is estimated at $1.8 billion.

The agreement that has folded between the two companies would have yielded $600 million for Chiasma and its investors. The proposal for the project initially occurred back in 2013.